You just don’t fit in

One of the reasons I advocate a flat tax is that it incentivizes wealth-building without a class mentality. It encourages success across the nation without punishing people for achieving that success. I believe this can work and want the discussion to start so that we can get to real change. Debate on this issue is productive. This, however, is ridiculous.

I would offer Americans an even lower flat tax rate–14% as opposed to 17%–and at the same time do more to help low-income people. Boston University economist Laurence Kotlikoff and I have put together a plan that works in the following way.

First we’d get rid of the across-the-board $9,000-per-person exemption in the Forbes plan. Why should billionaires like Bill Gates get an exemption? Forbes is giving too much money away to rich people. We’d save that exemption money and give it instead, in the form of a rebate, to the bottom third of earners, those who bring home roughly less than $25,000 for a family of four.

Second, Forbes ignores the 12.4% Social Security payroll tax (split between employer and employee). Currently, income over $90,000 a year is not subject to the tax. We don’t think it’s fair that a $50,000-a-year autoworker has to pay payroll taxes on all his income while a million-dollar-a-year auto executive does not. Under our proposal all wages would face the same income and payroll tax rates.

We would also use the rebate of tax dollars to the bottom third of taxpayers to solve other social problems. For example, instead of people automatically getting the 14% rebate, we would require them to show that they have health insurance and a retirement pension as a condition. Specifically, to get one-half the rebate (7%), low-income families would have to produce proof of health insurance. This would encourage millions of people who qualify to enroll in Medicaid or in their employer’s health plan. Barring that, families could apply the tax rebate to health insurance they purchase on their own. We propose making the other half (7%) contingent on proof of a pension, an IRA, a 401(k) or some other savings account.

So instead of national health insurance and more government spending on the elderly, we would use our flat-tax proposal to urge people to solve these problems on their own.

With this proposal, we receive a progressive tax system with special incentives and loopholes. Brilliant. This is little different in spirit than what we do today. I can’t comprehend how keeping the same screwed up mentality qualifies as reform. Specifically, who would administer all of this? Some bureaucrat has to sit in a government office and verify health insurance. Some other bureaucrat has to sit in another government office and verify pension accounts. This does not reduce the size and inefficiency of government. The question of affordable private healthcare remains. And if taxpayers have to have pensions to qualify for half of the rebate, why bother perpetuating Social Security? Just funnel FICA into private pension accounts. It also leads to interesting conundrums regarding privacy and self-determination.

Ultimately, though, the obvious flaw is that this plan assumes people won’t do these things if they have money in their bank accounts. It imposes a blatant Nanny State oversight upon poor people, condescending to them that perhaps they’re just not responsible enough to do these things. In some cases, that’s undeniably true, but we can’t legislate against stupidity. If people wish to do dumb things, so be it. No amount of new, creative laws will change the fundamental self-determination, however stupid, that people exhibit.

Worse, the government has shown for decades that it doesn’t trust the citizens who elect it. Like every other tax reform that changed only the redistribution effect, the scope creep of this tax recommendation will not stop with the poor once Congress begins playing with the parameters. Tax reform is essential, but as important as the numerical details are, changing the tax mentality is most important. The flat tax can do that, but not when supporters rig it with patronizing gobbledy-gook.

Softening butter vegan shortening, not America

Good grief, where to begin? I’ve written a number of times about the nonsense that is the sweeping generalization of a liberal bias in media, usually the MSM. I’ve also written against policies and actions of President Bush. I guess I’m a raging ideologue for the leftists. At least that’s the way I interpret John Fund’s logic while opining on the liberal fantasy not-so-subtly called Commander in Chief in today’s Opinion Journal. Consider:

The series pits Academy Award-winner Geena Davis against the patriarchal world of national politics until her “You Go, Girl!” attitude puts to rest the doubts of her many detractors. The creator of “Commander in Chief,” Rod Lurie, is apparently trying to broaden the show’s appeal by promising that he won’t be using it as a soapbox for his admittedly liberal views. He is quick to note that Ms. Davis isn’t playing a Democrat. Instead she is an independent who landed on a Republican ticket in order to offset a conservative candidate’s low approval rating among women.

Mr. Lurie insists that red-state viewers need not shun the show. He admits that he “can’t write to a belief system that I can’t swallow myself,” but he says that he has hired some conservative writers to make up for his deficit. Not that a balanced approach was evident at last week’s series-celebrating parties, in Washington and New York, hosted by the feminist White House Project.

Marie Wilson, the founder of the White House Project, told attendees how she struggled for years to convince Hollywood to do a show about a woman in the Oval Office. “We offered a prize, we offered to pay for a script. But they still didn’t think it would interest people,” she lamented. “Then like out of some Zen moment they suddenly decided the time was now.” And maybe the time is now: The latest Rasmussen Poll finds that more than three-quarters of voters are comfortable with the idea of a female president. All the Hillary-Condi talk clearly means something.

But Condi had nothing to do with the conversations at the White House Project parties. Attendees made it abundantly clear that they see the show as a liberal fantasy. Much as “The West Wing” portrayed the White House that liberals wish Bill Clinton had run, “Commander in Chief” will look forward to something resembling a Hillary Clinton presidency, or so its fans presume.

I didn’t watch Commander in Chief for a number of reasons, not least among them the simple fact that I don’t like Geena Davis. But also not least among them is that I think the concept for the show is dull. “Let’s take the president and make him a… her!” I can’t think of a more brain-dead attempt at creativity on network television now. If I landed on ABC while Commander in Chief was on, I’d turn the channel as fast as my thumb could move for fear that my brain would be infected by stupidity. Not liberal stupidity, just generic stupidity.

Consider how Mr. Fund developed his argument. He constantly referred to Hillary-Condi as a possible presidential confrontation in 2008. He even uses a 75% acceptance of a hypothetical female presidency. Remind me again what the election results were last year? Did 75% of voters choose the crazy liberal who can’t wait for Hillary to be dictator for life? By basic reasoning, this acceptance bleeds across political affiliations and ideology. It may be more prevalent in one party, but that doesn’t change the underlying reality. On paper, at least, most Americans say that the shocking idea of a woman as president deserves a yawn. Right, liberal conspiracies abound.

But more than that, I want to focus on Mr. Lurie’s specific statement. As he said, he “can’t write to a belief system that I can’t swallow myself.” Oh. Now I’m convinced. Even I’m willing to ignore the idea that hiring conservative writers will make it a “balanced” show. So what? Mr. Lurie’s statement told me everything I needed to know. If it turns out I’m wrong and the show is moderate, oops. I prejudged and missed out. Along with every other American, I do that every day. Somehow I survive.

That’s not to say I don’t get Mr. Lurie’s point. I’ve written fiction in which I’ve had one character murder another character. I’ve never killed anyone, nor would I ever do so. Does that make me unqualified to write such a scene? Of course not. But if I can’t, that’s different. Incompetence means an inferior product, unless he gets other writers, which he did. The vision still suffers, though, because as the creator he sets the foundation. Perhaps he did and I missed it. Again, if that’s so, oops, but that’s not a ringing endorsement for the show.

Extending this further, imagine reading a novel in which it’s clear the author had a moral axe to grind. He’s convinced that we should outlaw the military, for example. That’s going to be a story with few, if any, well-developed characters and interesting conflicts. The essence of good story-telling will involve interesting characters and interesting conflict. The “lesson” should flow from the story, and be evident from how the main character changes. The message as the foundation doesn’t work in literature, whether it’s books, movies, or television.

In the unfolding execution of the show, Mr. Fund will find that Commander in Chief will not further the President Hillary Clinton liberal fantasy. Viewers will watch, but if the show sucks, they’ll stop. If it preaches, they won’t. If ten million viewers tune in and that’s sufficient for ABC, the show will continue. But how are ten million viewers to an allegedly biased show sufficient to propel Senator Clinton to the presidency? Didn’t President Bush receive sixty million votes last November? And do you really believe that those undecided about Senator Clinton for president are too stupid and brainwashed to separate her from a television character? If people are that stupid, the hundred-plus million dollar box office for Fahrenheit 9/11 should’ve easily propelled Senator Kerry to the White House. Have you seen who calls 1600 Pennsylvania home? Stop worrying and trust America.

Will there be “Raaaaaaaar”?

You’re excited, correct? I know I am. After four long months, Alias returns tonight! (ABC, 8pm)

When we left off last season, Sydney and Vaughn were driving along the highway. Vaughn began to reveal a secret to Sydney involving him not being who she thought he was. In classic Alias fashion, the pregnant pause (the pun was too easy, I had to take it) between setup and punchline turned into SMACK as another vehicle t-boned our heroes. Doh! I wonder if they’ll live?!?

Alias underwent “changes” in the time off, as we now know. Future Senator Ben Affleck made it unavoidable that Agent Vaughn knocked Sydney up sometime last season, presumably in some post-Zombie celebratory bliss. I have qualms about this development because I remember the disaster that befell Mad About You when Paul and Jamie got a little too friendly, but I’m optimistic. J. J. Abrams has never let me down in four seasons of Alias (or in one-point-one seasons of Lost or four seasons of Felicity), so I think he’ll pull off the rare feat of adding a baby/pregnancy to a show and not ruining the show. I’m hopeful. I believe.

I know where I’ll be in four hours. You should be there, too.

Strange things are afoot at the Circle-K

Everyone knows by now that Representative Tom Delay (temporarily) stepped aside from his role as House Majority Leader because a grand jury indicted him on charges of conspiracy to violate campaign finance laws. I have nothing to add to that, other than he’s innocent until proven guilty and all that. I’m more interested in his (temporary) replacement, California Rep. David Dreier Missouri Rep. Roy Blunt.

The public relations machine is obviously kicking into gear now, stating how Rep. Dreier is this kind of moderate and that kind of conservative whatever they’re saying, which is probably less moderate since Rep. Blunt was Rep. DeLay’s right hand man. [Ed. – The rest of this stands, as I wrote it about Rep. Dreier.] I don’t know much about him and I have no reason to challenge any of that now. I’m open-minded about how he’ll work the system over the next few weeks and months as Rep. DeLay’s indictment plays out. But I suspect the Democratic smear campaign will start by tonight, if it hasn’t already, and I don’t think that’s wise.

Using basic logic, it makes no sense to think that Rep. Dreier Blunt will attempt any bold action in the near future. He can’t reverse the Republican status quo on the budget. (He should, but he won’t.) He can’t ignite the base with any new social red herrings for diversion. (He shouldn’t, but he might.) Any action he takes will be scrutinized relentlessly as an indicator of his leadership skills. He’s a 13-term representative Majority Whip, so he should have some pull, but any bold action would signify that he isn’t just a place holder until Rep. DeLay’s possible return, undermining DeLay’s future leadership. That would work if Rep. DeLay is really done as House Majority Leader, which is certainly a likelihood given his ludicrous statements and conduct. But the current Republican leadership in Congress has shown an eager willingness to circle the wagons around any scandal. I see no reason this will be different. Until Rep. Dreier Blunt shows something bold [Ed. – something that contradicts Rep. DeLay, since every statement will now be that Rep. Blunt is acting as Rep. DeLay would act], I’m holding onto that. If he does, then maybe I’ll take him seriously and focus on what he’ll try to accomplish.

Welcome to your no-win opportunity to lead the House, Rep. Dreier Blunt.

Update: This is rhetorical, but I wonder why the GOP leadership chose Rep. Blunt instead of Rep. Dreier, as Rep. Hastert preferred? Googling Rep. Dreier will likely offer an explanation.

The United State of America

Federalism may not be dead yet, but we can schedule the wake.

President Bush yesterday sought to federalize hurricane-relief efforts, removing governors from the decision-making process.

“It wouldn’t be necessary to get a request from the governor or take other action,” White House press secretary Scott McClellan said yesterday.

“This would be,” he added, “more of an automatic trigger.”

Mr. McClellan was referring to a new, direct line of authority that would allow the president to place the Pentagon in charge of responding to natural disasters, terrorist attacks and outbreaks of disease.

Alright, let’s do it. Let’s pass whatever legislation is necessary and amend the Posse Comitatus Act and toast marshmallows on our warm, happy feelings. But let me ask a question in the four nanoseconds before we ram this through. Why bother having a state chief executive (or even having states) if we’re going to federalize such an obvious role for a governor?

We all know this is stupidity coming from an administration yet to meet a federal expansion it doesn’t like. But the administration can’t possibly think the federal government will run this better than states. Louisiana is by all indications a very poor example for state competence, but whose fault is that? Louisiana citizens are responsible for voting in their leaders and maintaining watch over them. Naturally, this administration seems content to eliminate checks and balances on the government, so their obtuseness in this not-so-subtle point can be forgiven. When the residents of New Orleans allowed corruption to persist within the police department and local government, they made a choice with foreseeable consequences. I’m not indicting them or refusing sympathy for their plight in this, but when a person hits themselves in the head, repeatedly, with the clawed end of a hammer, we don’t become shocked when they start to bleed. We also don’t propose banning hammers.

Of course, President Bush can claim all sorts of failures within Louisiana governments, both state and local. But the mistakes flowed all around. Perhaps, if he’s sincere, the president will wait for an assessment of what went wrong (and what went right) before offering solutions to those faults. But all I’ve done is quote the White House press secretary. Maybe the president should speak for himself:

“It may require change of law,” Mr. Bush said yesterday. “It’s very important for us as we look at the lessons of Katrina to think about other scenarios that might require a well-planned, significant federal response — right off the bat — to provide stability.”

Who will make that determination? What level of “we didn’t see this disaster coming” is necessary? Is it all disasters, with or without warning? Again, if it’s not a state’s governor making that determination, why bother having states? Throw out our republican form of government and adopt a straight democracy. President Bush seems content on pushing for that with whatever the topic du jour happens to be, so perhaps he should just kill the slow descent and cut the cord. Yes, the landing will be hard, but at least we can begin with truth rather than this charade of federalism and Republican values.

The Universe is trying to crush my spirit, but I fight back

The water is rising in New Orleans again, which means here we go again.

“I’m sticking it out,” said Florida Richardson, who sat on her front porch in Algiers, holding her grandson on her lap. “This house is 85 years old. It’s seen a lot of tornadoes and a lot of hurricanes. You can’t run from the power of God.”

But you can drive from it. Maybe she can’t drive away; the article doesn’t make it clear. Why, though, the immediate descent into defeatism rooted in a vengeful, almighty God? I suspect I’ll never understand it.

But now my hand’s in my pocket every time I see you cry

Reports of data theft appear on the front page with increasing regularity now that technology makes it easier to swipe such data. Lax security also contributes, making consumers more vulnerable to fraud and identity theft. In response to one recent theft of Visa and MasterCard account information, this is in the news:

Testing the bounds of consumer protection laws, Visa USA Inc. and MasterCard International Inc. are headed for court to determine whether they are obliged to notify 264,000 customers that a computer hacker stole their account information.

The dispute to be argued Friday in San Francisco County Superior Court revolves around a highly publicized security breakdown at CardSystems Solutions Inc., one of the nation’s largest payment processors.

Although a ruling in the class-action consumer lawsuit wouldn’t have legal standing outside the state, it would increase the pressure on Visa and MasterCard to notify all affected accountholders in this and any future breaches.

I have no specific opinion about the legal aspects, but I’m intrigued by the business implications. My first inclination is that of course they should notify all affected accountholders. If Visa and MasterCard can’t protect my data sufficiently, I should know about that. More importantly, if thieves stole my information, I want to know so that I can be aware of the potential. I expect the banks holding my accounts to notify me, which leads to this:

San Francisco-based Visa and Purchase, N.Y.-based MasterCard maintain that responsibility should fall to the myriad banks that administer the accounts because neither credit card association has direct relationships with the affected customers.

I don’t specifically care how the backroom processing happens. Someone needs to notify me. If Visa and MasterCard decide that the banks should notify me, great. Negotiate it into the contracts with those banks. Visa and MasterCard are significant brands with a reputation that banks want to latch onto. Both companies have bargaining power there. But this doesn’t count as a justification:

In their legal briefs, Visa and MasterCard have argued there’s little chance any affected customer will lose a cent because of the association’s long-standing policies to reverse all charges for fraudulent transactions. The “zero liability” policy lessens the need to alert individual customers about the fraud risks, said MasterCard spokeswoman Sharon Gamsin.

In a statement, Visa also said it is comfortable with its anti-fraud measures. But both companies worry that the opposite message might be sent if they are ordered to warn individual customers.

“Such an order would harm the banks’ goodwill because some customers would certainly be confused by the notice and believe the issuing banks were somehow to blame for the security breach,” Visa’s attorneys argued in a court brief.

I’m not too stupid to understand English. Explain what happened and I’ll understand it. I’ll probably be able to decipher who’s at fault. However, perhaps they’re right that I’ll confuse the issue and blame the wrong party. That implies that Visa and MasterCard should work smarter at protecting data. If the banks don’t want to harm their goodwill, they’ll put pressure on Visa and MasterCard to improve security. They have bargaining power, too. If they think that acting as an extra line of protection for their customers won’t help their goodwill (if for no other reason than preventing loss of goodwill in cases like this), they’re stupider than I think they are.

I don’t have the market power to spank Visa or MasterCard, or even an individual bank. But a group of customers might force that pressure on a bank. The bank might then have minimal ability to change Visa and MasterCard by itself, but a group of banks most definitely has that ability. This lawsuit is proof that no one is powerless in the free market. A lawsuit may not be the best or most appropriate way to force change, but it’s usually effective. Visa and MasterCard should remember that where business refuses to regulate itself, government is more than willing to step and do the job. Me, I’d rather see self-regulation but I guess we know where Visa and MasterCard stand.

Impaled by “Borrow and Spend”

I decided a few days ago to write about the debt madness gripping President Bush and Congress, planning to explain how servicing the increasing national debt will crush us economically as the growing interest payments overwhelm our ability to pay for government with reasonable taxes. MSNBC beat me to it.

The cost of hocking ourselves to the eyeballs shows up in the line of the federal budget that says how much interest we’re paying. Interest will run about $350 billion in the current fiscal year, according to projections by the nonpartisan Congressional Budget Office. It rises to $385 billion next year, $426 billion the year after and so on. This is without Katrina. Just the interest on Katrina-call it 4 percent on $200 billion-is $8 billion a year. While $8 billion is trivial in a world of $2 trillion federal budgets, it’s still $40 billion over five years. That’s more than the aforementioned $35 billion of social-spending cuts would save.

Anyone who’s ever gotten himself into credit card debt understands the basic principal behind this. Borrow a little money and the interest payments are wasteful but manageable. Borrow a little more and the trouble begins. Fail to increase income or reduce expenses and the growing interest payments become a snowball. I did this in college and it took me a decade to dig out of it. The difference between me and the federal government is that I acknowledged my recklessness and adjusted.

Remember, President Clinton and Congress balanced the budget in the mid-1990s (with help from the Social Security Trust Fraud Fund, but rigged and balanced is better than rigged and deficit). Then the electorate gave complete control to one party (the “fiscal conservatives”, no less) and the budget flailed about, spitting out money without burning its own fat or gobbling any new funds to meet the demand. Under President Clinton, tax increases enabled the balancing. I don’t support tax increases now, and even if anyone in power did, it’s not going to happen. That leaves cost-cutting. Every time Congress votes for more pork and every time the president signs that pork, know that there are real consequences. And those consequences grow every year.